CA Foundation Training: Exam Pattern & Preparation

Learn more about the exam pattern, subjects to study, and structure of the CA Foundation Course

CA Foundation Paper 4 Syllabus

Paper - 4 : Business Economics And Business And Commercial Knowledge

(One paper – Three hours – 100 Marks)

Part I : Business Economics (60 Marks)


To develop an understanding of the concepts and theories in Business Economics and apply such concepts and theories in simple problem solving.

1. Introduction to Business Economics
(i) Meaning and scope of Business Economics
(ii) Basic Problems of an Economy and Role of Price Mechanism.

2. Theory of Demand and Supply
(i) Meaning and determinants of demand, Law of demand and Elasticity of demand - Price, income and cross elasticity
(ii) Theory of consumer’s behaviour – Marshallian approach and Indifference curve approach
(iii) Meaning and determinants of supply, Law of supply and Elasticity of supply.
(iv) Demand Forecasting

3. Theory of Production and Cost
(i) Meaning and Factors of production
(ii) Laws of Production – The Law of Variable proportions and Laws of Returns to Scale, Producer’s equilibrium
(iii) Concepts of Costs - Short-run and long-run costs, Average and marginal costs, Total, fixed and variable costs.

4. Price Determination in Different Markets
(i) Various forms of markets – Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly
(ii) Price determination in these markets.

5. Business Cycles
(i) Meaning
(ii) Phases
(iii) Features.
(iv) Causes behind these Cycles

Part – II : Business And Commercial Knowledge (40 Marks)


To develop an understanding of common business and commercial concepts and to keep abreast with developments in the business and commercial world.


1. Introduction to Business
Nature of Business, Profession and Employment. Objectives of Business. Economic and Non-Economic Activities, Forms of Business Organizations.

2. Business Environment
Micro and Macro Environment, Elements of Micro Environment – Consumers/Customers, Competitors, Organization, Market, suppliers, Intermediaries, Elements of Macro Environment – Demographic, Economic, Political-legal, Socio-cultural, Technological, Global Environment.

2. Measures of Central tendency and Dispersion
Measures of Central Tendency and Dispersion: Mean Median, Mode, Mean Deviation, Quartiles and Quartile Deviation, Standard Deviation, Co-efficient of Variation, Coefficient of Quartile Deviation.

3. Business organizations
Overview of leading Indian and Global Companies.

4. Government Policies for Business Growth
Policies creating conducive business environment such as Liberalization, Privatization, Foreign Direct Investment.

5. Organizations facilitating Business
(i) Indian regulatory bodies - SEBI, RBI, IRDA, CCI
(ii) Indian Development Banks – IFCI, SIDBI, EXIM Bank, NABARD

6. Common Business Terminologies
(i) Finance Terminologies.
(ii) Marketing Terminologies.
(iii) Stock & Commodity Markets Terminologies.
(iv) Banking Terminologies.
(v) Other Business Terminologies.

Note: Students are expected to read at least one financial newspaper and one business magazine on a regular basis. They may also watch a business channel to remain updated about the developments related to commercial world.